Brief:
- McDonald's is facing rising worker dissatisfaction, high employee turnover and long customer wait times stemming from the ramp-up of its "Experience of the Future" effort, a push to embrace newer technology like mobile ordering and payments, according to a Bloomberg report.
- Some employees say the new ordering technology is causing more trouble than it's worth, with chaos ensuing alongside self-service kiosks, mobile app ordering and traditional checkouts, Bloomberg reports. McDonald's said it hasn't seen a link between the new initiatives and higher employee turnover, according to a statement provided to Bloomberg
- Drive-thru times at the chain slowed to 239 seconds in 2017, more than 30 seconds longer than in the prior year, and behind Burger King, Wendy's and Taco Bell, according to QSR magazine. With unemployment at 17-year lows, turnover at U.S. fast-food restaurants has jumped to 150%, the highest since 1995, according to researcher People Report. That means a store employing 20 workers cycles through 30 in one year.
Insight:
McDonald's has quickly expanded its services to include mobile order and pay, and home delivery as part of its efforts to appeal to younger consumers that have shunned quick-service restaurants in favor of fast-casual dining at chains like Chipotle and Panera Bread.
While much of the employee frustration Bloomberg cites are tracked through anecdotal evidence that mobile ordering and self-serve kiosks add enough chaos to the operations to urge employees to quit, there are signs that the chain is too understaffed to handle its order volume, as shown in the increasing drive-thru times.
McDonald's is trying to manage a variety of economic forces faced by many service industries. Rising minimum wages are gradually pushing up the cost of hiring, even for the most inexperienced workers. In turn, that leads many restaurants to seek technologies to reduce headcount, such as kiosk ordering and mobile ordering and pay, as well as tablet ordering at sit-down restaurants.
Chains like Starbucks and Chipotle also had to adjust their store operations after introducing mobile ordering. McDonald's, which is the biggest U.S. burger chain with more than 14,000 U.S. restaurants, spent last year working out kinks in its mobile platforms and setting the stage for a larger push this year.
McDonald's experienced a high-profile misstep in its effort to emphasize mobile engagement when its app crashed during a free ice cream offer to celebrate National Ice Cream Day, causing customers to take to social media to air their frustrations.
But increasing mobile technology is a lifeline for the restaurant industry, which is traditionally slow to adopt newer technologies, particularly as consumer habits change. There is a distinct connection between those companies the adoption of mobile apps at quick service restaurants and revenue growth.
The direct customer connection provided by mobile apps also lets fast food companies reach customers more directly, even capitalizing on time-based offerings.